Research

Through our work at the forefront of digital health, we publish research on the trends shaping the future of healthcare. Browse our widely-cited digital health funding reports and special topics on the healthcare industry below—for full access, get in touch.

Reports

Digital health venture funding had its strongest start ever in 2020, with a prodigious $3.1B invested across Q1. In February the COVID-19 pandemic hit the US, sending an immediate shock through public markets. The twin crises of a global pandemic and massive economic shifts will rapidly impact all market sectors, including digital health. To assess the scale, direction, and timing of the impact, we surveyed twelve leading healthcare investors between March 16 and March 20, 2020 (and included our own response in the sample). Although the responses paint a somber picture of the emerging funding environment, there is a tangible sense of resolve to not waste this crisis—to leverage digital health solutions to immediately combat the pandemic and build on that momentum to radically reshape the way healthcare is delivered in the US and globally.

Across the last decade, digital health has grown from a blip on the radar of investors to a robust sector receiving nearly one in ten venture dollars invested in the United States. In 2019, 359 US digital health startups raised $7.4B from 627 investors. Though six digital health companies entered the public markets in 2019, exits were a somewhat mixed bag, with M&A below trend at 112 deals across 2019. For our complete 2019 Digital Health Market Update, connect with our partnerships team.

Despite significant disparities in healthcare leadership today, industry leaders and employees share a belief that gender parity can be achieved within our lifetime. This year, we surveyed individuals working at healthcare startups and VCs to understand how they perceive initiatives at their organizations to promote the advancement of women, and offer concrete solutions for leaders to actively advance gender equity.

Rock Health and the Stanford Center for Digital Health release their findings from the 2019 Consumer Adoption Survey. In 2019, overall consumer adoption of digital health leveled off near the 2018 high water mark. The five-year picture represented in our annual survey is one of a steady transition to a progressively more digital consumer healthcare experience.

Though funding slowed from the $2B per quarter pace in the first half of the year, digital health companies raised $1.3B in venture capital in Q3 2019 for a total of $5.5B in the year to date. This puts the sector on track for the second largest funding year ever. As in 2018, large deals continue to drive the overall trend. In this market update we discuss public market performance of the five 2019 digital health IPOs (early results are mixed) and two hot areas of investment: behavioral health and women’s health.

$4.2B was invested in digital health through the first half of 2019. The sector continues to experience healthy growth—we still don’t see the telltale signs of an investment bubble. Here we take stock of the capital invested in digital health startups since 2011—$29.4B of which is waiting on liquidity. We examine two avenues to return this capital: public offerings and acquisition by large non-healthcare companies.

We've reported record levels of funding for digital health in four of the past five years. Q1 2019 shows signs that funding is leveling off compared to 2018's record-smashing $8.1B total. Here we take a deeper look at patterns in capital concentration in digital health. We line up our analysis with insights from Michael Greeley, our good friend who explored the trend towards capital concentration in VC overall in his recent blog post.

Digital therapeutic and pharmaceutical companies are partnering to build, validate, and expand access to new, software-based solutions that improve patient outcomes. This is new territory with few precedents, and the strategies for building successful alliances remain uncertain. Drawing from numerous interviews with digital therapeutic, pharma, and health plan leaders, this research outlines how to overcome execution risks and build successful pharma-digital therapeutic alliances.

Coming off a record-smashing year for digital health funding in 2018, we see funding leveling off in the first quarter of 2019. Meanwhile, after a two-and-a-half-year drought, the digital health IPO market is heating up. Here’s the data and our take on how 2019 is shaking out so far for digital health.

In a banner year for digital health funding, AI/ML companies raced to the top in dollars raised, investors showed excitement about on-demand healthcare services, and more women CEOs closed rounds than ever before—though they still represent a small sliver of the pie.

With a record $8.1B in funding and the absence of an equally robust exit market, there is more scrutiny on digital health than ever before. Will value creation track with recent investment trends? To provide some structure around this question, we validated a simple framework with fellow investors to assess the current “bubbliness” of digital health. Our verdict: digital health is not in a bubble.

With America's addiction epidemic taking a devastating toll on lives and communities, technology-based startups are offering a new path forward. These solutions focus on providing evidence-based, continuous, and accessible experiences for individuals living with an addiction. To understand how digital offerings are driving real value to patients, we interviewed six startups.

At the close of its third quarter, 2018 is already the most-funded year ever for digital health startups. There has never been a better time to raise money, with founders securing larger and more frequent rounds. Yet numbers alone don’t tell the full story of the progress made in digital health thus far in 2018.

To capitalize on the shift to value-based care and consumer demand for a better healthcare experience, a new type of business has emerged: next-generation payers and providers (“NGPPs”). Without the constraints of legacy payment models and operating systems, these companies were created to deliver a reimagined service to patients, prioritizing health and outcomes over utilization. We interviewed five NGPPs to understand their technology-supported strategies, with a focus on how they’ve partnered with startups and how they expect to keep pace with future innovation.

Women are critical stakeholders in healthcare, serving as workers, caregivers, and consumers—yet they do not have an equal voice in the ranks of leadership. Our goal with this annual report is to contribute to a meaningful and actionable dialogue around women in leadership, with the hopes of providing a foundation for our industry to finally turn this dialogue into action.

It’s déjà vu for digital health, with yet another record breaking half for venture funding. The continued upward trajectory from 2017 through the first half of 2018 is not a fluke. Instead, this sustained growth is indicative of the maturation one would expect from a stable, emerging investment sector (coupled with a strong overall venture ecosystem). Read on to learn our five key findings from this eventful half.

On the heels of the biggest year in venture funding, the digital health space is starting off 2018 with a bang: record Q1 funding of $1.62B, three $100M+ mega-deals, and a massive exit. Compared to last year, the commotion from policy debates has largely settled and a path to regulatory clarity has emerged. On our end, we’ve launched a couple of new sections within our funding post—check out our deep investor analysis as well as an update on the sometimes elusive, always critical quest of every digital health company: validation.

Last month, we released our whitepaper, Demystifying AI and Machine Learning in Healthcare. In this latest blog post, you’ll learn how venture funding gives us a glimpse into the AI/ML use cases taking hold now—and those areas that aren’t ripe yet. ICYMI: Our first post established a framework to understand the algorithms underpinning AI to allow stakeholders to more readily identify true breakthrough innovation.

AI in healthcare feels inevitable: Optimists predict that artificial intelligence and machine learning (AI/ML) will diagnose disease better and earlier, treat illness more precisely, and engage patients more efficiently than today’s healthcare system does. On top of this, AI/ML is expected to streamline business operations and restore sanity (and humanity) to the clinician experience. To separate hype from reality, and access the complete white paper, connect with our partnerships team.

2017 was a record year for digital health by many accounts: total funding far surpassed previous years, there were more investors participating in digital health deals, and we saw more mega deals of $100M+ than ever before. With the industry maturing and entering its “middle innings,” we significantly expanded our Digital Health Funding Database and the information we track on every venture deal and company.

2017 was a record-smashing year for digital health, with venture funding approaching $6B and the most mega deals ($100M+) to date. It’s clear that the early game has concluded and digital health is entering the “middle innings” as an investment sector.

Women are critical stakeholders in healthcare, serving as workers, caregivers, and consumers—yet they do not have an equal voice in the ranks of leadership. Our goal with this report is to contribute to a meaningful and actionable dialogue around women in leadership, with the hopes of providing a foundation for our industry to finally turn this dialogue into action.

2017 is already the largest year yet for digital health funding—but the funding spike of Q2 has steadied. Q3 funding came in at $1.2B, bringing the YTD total to $4.7B and pushing funding beyond the prior historic annual high of $4.6B in 2015. Of note: 16% of the 83 deals this quarter were raised by companies led by women CEOs, up from 11% at the half-year mark.

For digital health startups, it’s increasingly a B2B world—and innovators are acutely feeling the challenges of enterprise sales. Selling to payers, providers, biopharma companies, and others is a tough game across the board. Sales cycles are long, requiring patience and a knack for relationship building. Finding the right buyer in a big organization can be disorienting. And crafting the pitch is tricky when talking to a complex, multi-faceted enterprise customer.

As the digital health sector matures, investors are putting more money into more deals. In the first half of 2017, $3.5B was invested in 188 digital health companies, setting a record for number of companies funded and total amount invested.

When we started tracking deals in 2011, the newly enacted Affordable Care Act served as a major catalyst for market growth. We’ve only tracked digital health in an ACA-world, so we’ve been on the edge of our seats as the new administration vows to repeal this landmark reform.

2016 was a strong year for digital health, but it also created an environment for discretion and focus for founders and investors alike. There were a record number of companies funded; and while the total amount of dollars decreased from 2015, we remain optimistic in the strength of the sector and the value of the companies improving our healthcare system.

The genomics industry has tremendous potential to move the needle in health. Delivering on the promise of genomics depends on three main factors—many of which are within the purview of digital health. Through our survey of one thousand consumers, we provide novel data and insights regarding adoption, willingness to pay for specific use cases, and explore concerns around privacy and ownership.

After years of record-breaking venture funding, digital health finally hit its stride in a year when everyone expected funding to decline. In the first half of 2016, slightly over $2B filled company coffers–on track with both 2014 and 2015.

2015 was another year of big numbers for digital health—the year closed out with over $4.5B in funding flooding into the space, a sizable increase in the number of later stage rounds, and 187 M&A deals.

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